Entrepreneur revives plan for apartments downtown

Two companies belonging to Sarasota software millionaire Jesse Biter have just shelled out $4.075 million to purchase nearly 18,000-square feet of retail space on Sarasota's Main Street. Biter's company LanHole LLC first bought a 9,700-square-foot retail building at 1564 Main Street in Sarasota for $2 million with help from a $1.5 million loan from Gateway Bank. Then Downtown Project LLC, another Biter company, spent $2.075 million to buy the adjacent 8,154-square-foot retail building at 1560 Main St. The purchase includes all storefronts from Pho Cali to the former Sarasota Hardware.

Last Modified: Friday, February 22, 2013 at 5:41 p.m.

Two companies belonging to Sarasota software millionaire Jesse Biter have just shelled out $4.075 million to purchase nearly 18,000-square feet of retail space on Sarasota's Main Street. Biter's company LanHole LLC first bought a 9,700-square-foot retail building at 1564 Main Street in Sarasota for $2 million with help from a $1.5 million loan from Gateway Bank. Then Downtown Project LLC, another Biter company, spent $2.075 million to buy the adjacent 8,154-square-foot retail building at 1560 Main St. The purchase includes all storefronts from Pho Cali to the former Sarasota Hardware.

STAFF PHOTO / MIKE LANG

If Biter's talks to acquire parcels near the Whole Foods Market Centre and build on them are successful, it would mark the first significant residential development in Sarasota in more than five years.

Biter, who previously has acquired a handful of office and retail spaces downtown, hopes to close on the parcels now under contract and totalling a little over 1 acre by May.

One of the properties is occupied by the United Way of Sarasota County Inc., at 1445 Second St., which had contemplated a move even before its merger last year with counterparts in Pinellas and Hillsborough counties.

Biter intends to build small, studio-style apartments targeted to young professionals who want to live downtown but cannot afford condominium prices that stretch into the millions of dollars.

He contends that the units, which would average 800 square feet and rent from an estimated $1,000 to $2,000 per month, would benefit local employers as well. Biter said those earning about $40,000 a year would be able to afford the units.

"As an employer it's important to me that my employees are close to their work," Biter said. "I know a lot of other businesses feel that way as well. The majority of my employees currently live in new digs, but drive 20 or 30 minutes to work each way. There is just nothing nice and new that they can afford downtown."

Biter declined to discuss the contract prices for the parcels, which also includes a lot at 1401 Second St.

"We get a lot of renters coming in and asking about downtown," said Amy Chapman, rental director for brokerage firm Michael Saunders & Co. "There's a big demand for products between $1,000 and $2,000."

Biter's plan also comes as various investors — among them the giant Blackstone Group of New York — have begun snapping up residential properties to meet increased demand for rentals.

In the past year alone, average residential rents in Sarasota have jumped 9 percent to reach 92 cents per square foot, according to Sarasota Management & Leasing.

But Biter, a 36-year-old Pennsylvania native who made millions of dollars developing software for the auto industry and has plowed his fortune into downtown real estate, hopes to differentiate his project with amenities aimed at younger tenants.

He hopes to include a rooftop restaurant, first-floor retail space, a laundry service and a communal auto sharing program.

The latest incarnation

Biter's idea for the property is not a new one, however.

In April 2007, developer Leonard Garner tried to combat a lack of so-called "attainable" housing by proposing a 10-story apartment complex with the same number of units on the same site.

"This is absolutely the perfect site for this use," Garner said at the time. "It has everything one could dream of — location, configuration, proximity to transportation, everything."

But Garner's "Alcazar" plan collapsed when the region's housing market imploded, financing dried up and the Great Recession took hold.

Still, if Biter is able to pull required city permits for his complex by 2015, he would be able to take advantage of increased residential density that Garner was granted, which would allow more units than typical zoning permits.

Analysts say the project has a better shot at being built now, the result of economic improvements and changes within Sarasota's makeup.

"Sarasota has come of age, and we need to take advantage of it," said Stan Rutstein, a commercial broker with the Re/Max Alliance Group.

"Downtown is a very hot vehicle," Rutstein added. "People of all ages want to live downtown, and no new product has come out in years, certainly none that's affordable."

Apartments, in particular, have not been developed because developers would rather focus on condominiums, which require a single sale to a buyer, instead of apartments that need to be continually rented and maintained.

But as residential financing has been slow to rebound, developers are once again eyeing rentals to appeal to a swollen market of recession-battered borrowers now forced to rent as a result of foreclosures.

If the land purchase goes through — the United Way's building would be razed and the group would likely relocate elsewhere downtown — it would mark the latest in a series of purchases for Biter.

In addition to a penthouse unit he owns and resides in in Marina Tower downtown, which he acquired for $3.85 million in December 2007, Biter also spent $2.8 million for a former bank building now used as an incubator for high-tech companies known as "The Hub."

Biter also paid $1.6 million to buy 11,000 square feet of retail space on the ground floor of the city's Palm Avenue parking garage at the beginning of last year, and most recently, companies he controls paid nearly $4.1 million to buy Main Street storefronts totalling 18,000 square feet.

"I am very confident that Sarasotians will want to live here," he said of the planned apartments. "I already have more than 40 people on a waiting list, plus three businesses that have agreed to lease a total of 35 units they can subsidize for their employees."

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